Gordon Brown, the British prime minister, said the introduction of a global
tax to reduce risky behaviour by banks was "worth looking at", as
he prepared for this week G20 summit.

AFP

8:40AM BST 22 Sep 2009

But Mr Brown said greater cooperation between countries to stop excessive risk taking was required before such a tax could be considered.

France has proposed introducing a tax to be levied on every financial transaction, known as a Tobin Tax, with the billions of euros raised to be used to support economic development.

Brown said such an idea was worth consideration, but global cooperation that is "cemented" and "action that is successful against tax havens" were required before taking any steps towards the measure.

The prime minister, briefing journalists on Monday before leaving for the UN General Assembly in New York and then the Group of 20 summit in Pittsburgh, said the level of cooperation to prevent risky deals was still unsatisfactory.

"The first thing is to have the global coordination to involve every major country and we are not there yet," he said.

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"The second thing is to deal with tax havens. If one jurisdiction can fail to implement a proposal such as this it makes it difficult for other jurisdictions to follow.

"So I think what you will see this week and particularly next week is action against tax havens that are non-cooperative around the world."

Most commentators expect Britain and the United States to oppose such a tax, fearing its impact on their major financial centres.

The Tobin Tax is named after the US economist James Tobin, who first suggested it in the 1970s.

The idea was revived in August by Adair Turner, the chairman of Britain's financial watchdog, the Financial Services Authority (FSA), as a way of providing a safeguard against another economic slowdown.